What is Invoice Finance?

What are the features of unsecured cash flow loans?
May 21, 2020
What are the features of invoice finance?
May 21, 2020

Invoice financing facilities provide finance against your unpaid invoices. Therefore, where invoices have 90-day terms, they can severely affect your business cash flow. Plus, we find business cashflow suffers further when there is a change in invoice terms from 30-day to 90-day terms. Therefore, the business struggles to fund a further 60 days before receiving revenue.

You could obtain finance against invoices and receive up to 80% of the outstanding invoice. Then the remaining 20% is received once your customer pays the invoice (minus the interest and costs). Also, the financing costs are related to individual invoices. Therefore, they are a cost of sale and not an ongoing overhead.